Best Buy posts surprise profits as demand for ultra-HD TVs skyrockets

It's been a good couple of days for Twin Cities companies after Best Buy followed Target in announcing better-than-expected quarterly profits on Thursday.

Growing demand for ultra high-definition televisions helped the Richfield-based electronics chain to third-quarter profits of $107 million – way up from the $54 million earned in the same period last year, according to a company announcement.

In addition to TVs, there were also good sales figures in the computers, gaming and appliances departments, which offset falls in cellphone and tablet sales, the company announcement states.

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It is a welcome boost for the retailer that has struggled to cope with the challenge from online competitors such as Amazon, which has prompted price cuts that have eaten into the company's revenue, and a cost-cutting turnaround plan started when chief executive Hubert Joly joined the company in 2012, Advertising Age reports.

This heavy discounting means there is likely to be little change to profits in the next quarter, the all-important holiday season, according to Bloomberg.

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“The promotional environment is already intense, a little bit more intense than last year,” Joly said on a conference call.

CNN Money notes that Best Buy is fighting back online as well as in stores, with digital sales rising 22 percent year-on-year.

Similarly, Target revealed on Wednesday it had seen a 30 percent increase in online sales in the third quarter, which contributed to a 3.1 percent profits jump.